##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C. 20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES AND EXCHANGE ACT OF 1934For the quarterly period ended
    August 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to    Commission file number 0-19603
  CENTENNIAL
 COMMUNICATIONS CORP.
 (Exact name of registrant as
    specified in its charter)
   Delaware

06-1242753(State or other jurisdiction
    of
    incorporation or organization)

(IRS Employer
    Identification No.)    3349
    Route 138
    Wall, NJ 07719 (Address
    of principal executive offices,
    including zip code)
   (732) 556-2200 (Registrants
    telephone number,
    including area code)
   þ o
  Rule 12b-2 o þ o
  Rule 12b-2 o þ




---



##### 



TABLE OF
    CONTENTS
   
 Part I  Financial
    InformationItem 1.


Financial Statements


2Item 2.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


22Item 3.


Quantitative and Qualitative Disclosures about
    Market Risk


37Item 4.


Controls and Procedures


38Part II  Other
    InformationItem 1.


Legal Proceedings


39Item 1A.


Risk Factors


39Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


39Item 3.


Defaults Upon Senior Securities


40Item 4.


Submission of Matters to a Vote of Security
    Holders


40Item 5.


Other Information


40Item 6.


Exhibits


40EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   1




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION
  ITEM 1.
    FINANCIAL
    STATEMENTS  CENTENNIAL
    COMMUNICATIONS CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Unaudited)
    (Dollar amounts in thousands, except share data)
  August 31,


May 31,2007


2007ASSETSCURRENT ASSETS:Cash and cash equivalents

$
111,681


$
94,740Accounts receivable, less allowance
    for doubtful accounts of $8,248 and $7,571, respectively


93,095



88,292Inventory  phones and
    accessories, net


26,300



31,624Prepaid expenses and other current
    assets


21,163



18,257Total Current Assets


252,239



232,913Property, plant and equipment, net


566,992



574,503Debt issuance costs, less
    accumulated amortization of $27,323 and $25,295, respectively


40,844



42,872Restricted cash


6,264



5,926U.S. wireless licenses


398,783



398,783Puerto Rico wireless licenses, net


54,159



54,159Goodwill


4,187



4,187Cable facility, net


3,430



3,490Other assets


4,955



5,148TOTAL ASSETS

$
1,331,853


$
1,321,981LIABILITIES AND
    STOCKHOLDERS DEFICITCURRENT LIABILITIES:Accounts payable


29,852


$
20,839Accrued expenses and other current
    liabilities


161,719



191,524Payable to affiliates


75



125Total Current Liabilities


191,646



212,488Long-term debt


2,047,789



2,046,565Deferred income taxes


129,573



124,783Other liabilities


30,968



16,523Minority interest in subsidiaries


4,445



4,293Commitments and contingencies (see
    Note 8)STOCKHOLDERS DEFICIT:Preferred stock, $0.01 par
    value per share, 10,000,000 shares authorized, no shares
    issued or outstanding






Common stock, $0.01 par value
    per share, 240,000,000 shares authorized; issued
    107,324,033 and 106,899,286 shares, respectively; and
    outstanding 107,253,530 and 106,828,783 shares, respectively


1,073



1,069Additional paid-in capital


24,559



19,832Accumulated deficit


(1,097,417
)


(1,103,379
)Accumulated other comprehensive
    income (loss)


294



884(1,071,491
)


(1,081,594
)Less: cost of 70,503 common shares
    in treasury


(1,077
)


(1,077
)Total Stockholders Deficit


(1,072,568
)


(1,082,671
)TOTAL LIABILITIES AND
    STOCKHOLDERS DEFICIT

$
1,331,853


$
1,321,981    2




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##### Table of Contents



CENTENNIAL
    COMMUNICATIONS CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
    (Dollar amounts in thousands, except per share data)
  Three Months EndedAugust 31,


August 31,2007


2006REVENUE:Service revenue

$
234,359


$
213,036Equipment sales


13,611



12,365247,970



225,401COSTS AND EXPENSES:Cost of services (exclusive of depreciation and amortization
    shown below)


46,574



43,242Cost of equipment sold


31,522



28,684Sales and marketing


25,586



22,678General and administrative


47,306



40,876Depreciation and amortization


33,356



32,218Loss on disposition of assets


349



205184,693



167,903Operating income


63,277



57,498Interest expense, net


(48,584
)


(50,714
)Income from continuing operations before income tax expense,
    minority interest in income of subsidiaries and income from
    equity investments


14,693



6,784Income tax expense


(8,261
)


(7,081
)Income (loss) from continuing operations before minority
    interest in income of subsidiaries and income from equity
    investments


6,432



(297
)Minority interest in income of subsidiaries


(152
)


(208
)Income from equity investments






253Income (loss) from continuing operations


6,280



(252
)Discontinued operations:Loss






(1,365
)Loss on disposition


(514
)


Income tax expense






(542
)Net loss from discontinued operations


(514
)


(1,907
)Net income (loss)

$
5,766


$
(2,159
)Earnings (loss) per share:BasicEarnings (loss) per share from continuing operations

$
0.06


$
0.00Loss per share from discontinued operations


0.00



(0.02
)Net income (loss) per share

$
0.06


$
(0.02
)DilutedEarnings (loss) per share from continuing operations

$
0.06


$
0.00Loss per share from discontinued operations


0.00



(0.02
)Net income (loss) per share

$
0.06


$
(0.02
)Weighted-average number of shares outstanding:Basic


107,062



105,211Diluted


110,011



105,211    3




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##### Table of Contents



CENTENNIAL
    COMMUNICATIONS CORP. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (Dollar amounts in thousands)
  Three Months EndedAugust 31,


August 31,2007


2006OPERATING ACTIVITIES:Net income (loss)

$
5,766


$
(2,159
)Adjustments to reconcile net
    income (loss) to net cash provided by operating activities:Depreciation and amortization


33,356



35,817Stock-based compensation


3,055



2,106Excess tax benefits from
    stock-based compensation


(526
)


(43
)Minority interest in income of
    subsidiaries


152



208Income from equity investments






(253
)Distributions received from equity
    investments






215Loss on disposition of assets


349



205Changes in assets and liabilities


(7,382
)


(27,581
)Net cash provided by operating
    activities


34,770



8,515INVESTING ACTIVITIES:Proceeds from disposition of
    assets, net of cash expenses


7



316Acquisition of minority interest,
    net






(2,500
)Capital expenditures


(19,996
)


(16,862
)Net cash used in investing
    activities


(19,989
)


(19,046
)FINANCING ACTIVITIES:Repayment of debt


(467
)


(436
)Proceeds from the exercise of
    stock options


1,805



210Proceeds from issuance of common
    stock under employee stock purchase plan


296



461Excess tax benefits from
    stock-based compensation


526



43Net cash provided by financing
    activities


2,160



278Net increase (decrease) in cash
    and cash equivalents


16,941



(10,253
)Cash and cash equivalents,
    beginning of period


94,740



94,884Cash and cash equivalents, end of
    period

$
111,681


$
84,631SUPPLEMENTAL CASH FLOW DISCLOSURE:Cash paid during the period for:Interest

$
62,568


$
67,698Income taxes

$
357


$
740NON-CASH TRANSACTION:Fixed assets acquired under
    capital leases

$
989


$
2,536Acquisition of minority interest
    included in accrued expenses and other current liabilities

$



$
1,000    4




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 (Dollar amounts in thousands, except per share amounts)
  NOTE 1.
    INTERIM
    FINANCIAL STATEMENTS  Form 10-K,
  NOTE 2.
    OTHER
    INTANGIBLE ASSETS AND GOODWILL  Other
    Intangible Assets
    As of


As ofAugust 31, 2007


May 31, 2007U.S. wireless licenses

$
398,783


$
398,783Puerto Rico wireless licenses


54,159



54,159Total

$
452,942


$
452,942   Goodwill and Other
    Intangible Assets
     5




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Disclosures about
    Segments of an Enterprise and Related Information
      As of August 31, 2007


As of May 31, 2007Estimated


Gross





GrossUseful


Carrying


Accumulated


Carrying


AccumulatedLife


Amount


Amortization


Amount


AmortizationCable facility


25 years



6,000



2,570



6,000



2,510     Goodwill
    NOTE 3.
    DEBT    As of


As ofAugust 31, 2007


May 31, 2007Senior Secured Credit Facility  Term Loans

$
550,000


$
550,00081/8% Senior
    Unsecured Notes due 2014


325,000



325,000101/8% Senior
    Unsecured Notes due 2013


500,000



500,000Senior Unsecured Holdco Floating Rate Notes due 2013, net of
    unamortized discount of $2,660 and $2,785, respectively


347,340



347,21510% Senior Unsecured Holdco Fixed Rate Notes due 2013


200,000



200,000103/4% Senior
    Subordinated Notes due 2008


45,000



45,000Capital Lease Obligations


68,329



67,128Financing Obligation  Tower Sale


12,120



12,222Total Long-Term Debt


2,047,789



2,046,565Current Portion of Long-Term Debt






Net Long-Term Debt

$
2,047,789


$
2,046,565  6




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Senior
    Secured Credit Facility
        High-Yield
    Notes
    1 8
  1 8
  3 4
 7




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Derivative
    Financial Instruments
                 8




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    August 31, 2008

$
August 31, 2009


44,546August 31, 2010


16August 31, 2011


550,125August 31, 2012


328August 31, 2013 and thereafter


1,455,4342,050,449Unamortized discount


(2,660
)$
2,047,789     NOTE 4.
    TAXES  Interim
    Financial Reporting Accounting for Income Taxes in
    Interim Periods  An Interpretation of APB Opinion
    No. 28
    Accounting for Uncertainty in
    Income Taxes  an interpretation of FASB Statement
    No. 109 Accounting for
    Income Taxes
       9




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
    NOTE 5.
    DISCONTINUED
    OPERATIONS  Accounting for the
    Impairment or Disposal of Long-Lived Assets
    Three Months EndedAugust 31,2007


2006Revenue

$



$
18,836Loss from discontinued operations






(1,365
)Loss on disposition


(514
)


Income tax expense






(542
)Net loss from discontinued operations

$
(514
)

$
(1,907
)   NOTE 6.
    RECENT
    ACCOUNTING PRONOUNCEMENTS  No. 06-1, Accounting for Consideration Given by a Service Provider to
    Manufacturers or Resellers of Equipment Necessary for an
    End-Customer to Receive Service from the Service Provider (EITF 06-1), EITF 06-1 EITF 06-1 EITF 06-1 EITF 06-1
  NOTE 7.
    ACQUISITIONS
    AND DISPOSITIONS   10




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 8.
    COMMITMENTS
    AND CONTINGENCIES  Legal
    Proceedings:
          Guarantees:
   11




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Lease
    Commitments:
      Other
    Commitments and Contingencies:
    NOTE 9.
    SEGMENT
    INFORMATION     12




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Three Months EndedAugust 31,2007


2006U.S. WIRELESSService revenue

$
109,340


$
91,709Roaming revenue


17,952



19,322Equipment sales


10,312



9,390Total revenue


137,604



120,421Adjusted operating income


53,139



43,691Total assets


1,817,248



1,904,084Capital expenditures


7,051



5,403PUERTO RICO WIRELESSService revenue

$
76,904


$
73,098Roaming revenue


1,136



1,467Equipment sales


3,298



2,975Total revenue


81,338



77,540Adjusted operating income


28,693



31,613Total assets


275,567



386,158Capital expenditures


7,473



7,229PUERTO RICO BROADBANDSwitched revenue

$
13,602


$
13,835Dedicated revenue


16,274



14,452Other revenue


2,128



2,024Total revenue


32,004



30,311Adjusted operating income


18,205



16,849Total assets


195,019



727,278Capital expenditures


5,472



3,743ELIMINATIONS/ADJUSTMENTSTotal revenue(1)

$
(2,976
)

$
(2,871
)Total assets(2)


(955,981
)


(1,584,023
)CONSOLIDATEDTotal revenue

$
247,970


$
225,401Adjusted operating income


100,037



92,153Total assets


1,331,853



1,433,497Capital expenditures


19,996



16,375     (1)
    
    Elimination of intercompany revenue, primarily from Puerto Rico
    broadband to Puerto Rico wireless.(2)
    
    Elimination of intercompany investments. 13




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Three Months EndedAugust 31,2007


2006Adjusted operating income

$
100,037


$
92,153Depreciation and amortization


(33,356
)


(32,218
)Stock-based compensation expense


(3,055
)


(1,949
)Strategic alternatives/recapitalization costs






(283
)Loss on disposition of assets


(349
)


(205
)Operating income


63,277



57,498Interest expense, net


(48,584
)


(50,714
)Income tax expense


(8,261
)


(7,081
)Minority interest in income of subsidiaries


(152
)


(208
)Income from equity investments






253Income (loss) from continuing operations


6,280



(252
)Loss from discontinued operations


(514
)


(1,907
)Net income (loss)

$
5,766


$
(2,159
)   NOTE 10.
    CONDENSED
    CONSOLIDATING FINANCIAL DATA   14




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##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING BALANCE SHEET FINANCIAL DATA
    As of August 31, 2007
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
36,156


$



$
75,525


$



$



$
111,681Accounts receivable, net


40,505







52,590











93,095Inventory  phones and accessories, net


12,103







14,197











26,300Prepaid expenses and other current assets


14,497







6,666











21,163Total current assets


103,261







148,978











252,239Property, plant & equipment, net


247,469







319,523











566,992Debt issuance costs


14,578







26,266











40,844Restricted Cash


6,264



















6,264U.S. wireless licenses










398,783











398,783Puerto Rico wireless licenses, net










54,159











54,159Goodwill


4,187



















4,187Investment in subsidiaries






940,250



610,251



(757,389
)


(793,112
)


Other assets


5,970







2,415











8,385Total

$
381,729


$
940,250


$
1,560,375


$
(757,389
)

$
(793,112
)

$
1,331,853LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Accounts payable

$
17,530


$



$
12,322


$



$



$
29,852Accrued expenses and other current liabilities


78,267







83,452











161,719Payable to affiliates










75











75Total current liabilities


95,797







95,849











191,646Long-term debt


793,063



636,395



70,991



547,340







2,047,789Deferred income taxes


2,854







126,719











129,573Other liabilities


5,523







25,445











30,968Intercompany


16,883



1,041,890



1,130,476



(231,867
)


(1,957,382
)


Minority interest in subsidiaries










4,445











4,445Redeemable preferred stock


597,238















(597,238
)


Stockholders (deficit) equity:Common stock














1,073







1,073Additional paid-in capital


(818,499
)






818,499



24,559







24,559Accumulated (deficit) equity


(311,213
)


(738,329
)


(711,966
)


(1,097,417
)


1,761,508



(1,097,417
)Accumulated other comprehensive income


83



294



(83
)










294(1,129,629
)


(738,035
)


106,450



(1,071,785
)


1,761,508



(1,071,491
)Less: treasury shares














(1,077
)






(1,077
)Total stockholders (deficit) equity


(1,129,629
)


(738,035
)


106,450



(1,072,862
)


1,761,508



(1,072,568
)Total

$
381,729


$
940,250


$
1,560,375


$
(757,389
)

$
(793,112
)

$
1,331,853  15




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
    For the Three Months Ended August 31, 2007
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)Revenue

$
103,165


$



$
178,678


$



$
(33,873
)

$
247,970Costs and expenses:Cost of services (exclusive of depreciation and amortization
    shown below)


18,807







28,511







(744
)


46,574Cost of equipment sold


8,242







23,280











31,522Sales and marketing


10,459







15,127











25,586General and administrative


23,922







56,513







(33,129
)


47,306Depreciation and amortization


16,386







16,970











33,356Loss (gain) on disposition of assets


438







(89
)










34978,254







140,312







(33,873
)


184,693Operating income


24,911







38,366











63,277Income (loss) from investments in subsidiaries






5,766



(1,139
)


5,766



(10,393
)


Interest expense, net


(26,161
)


14,446



(21,716
)


(15,153
)






(48,584
)Intercompany interest allocation






(14,446
)


(707
)


15,153







(Loss) income from continuing operations before income tax
    expense, minority interest in income of subsidiaries and income
    from equity investments


(1,250
)


5,766



14,804



5,766



(10,393
)


14,693Income tax benefit (expense)


111







(8,372
)










(8,261
)(Loss) income from continuing operations before minority
    interest in income of subsidiaries and income from equity
    investments


(1,139
)


5,766



6,432



5,766



(10,393
)


6,432Minority interest in income of subsidiaries










(152
)










(152
)(Loss) income from continuing operations


(1,139
)


5,766



6,280



5,766



(10,393
)


6,280Loss from discontinued operations










(514
)










(514
)Net (loss) income

$
(1,139
)

$
5,766


$
5,766


$
5,766


$
(10,393
)

$
5,766  16




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
    For the Three Months Ended August 31, 2007
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)OPERATING ACTIVITIES:Net (loss) income


(1,139
)


5,766



5,766



5,766



(10,393
)


5,766Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Depreciation and amortization


16,386







16,970











33,356Stock-based compensation expense


1,599







1,456











3,055Excess tax benefit from stock-based compensation










(526
)










(526
)Minority interest in income of subsidiaries










152











152Equity in undistributed earnings (loss) of subsidiaries






5,766



(1,139
)


5,766



(10,393
)


Loss (gain) on disposition of assets


438







(89
)










349Changes in assets and liabilities, net of effects of
    acquisitions and dispositions and other


(18,068
)


(11,182
)


1,167



(18,685
)


39,386



(7,382
)NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES


(784
)


350



23,757



(7,153
)


18,600



34,770INVESTING ACTIVITIES:Proceeds from disposition of assets, net of cash expenses










7











7Capital expenditures


11,347







(31,343
)










(19,996
)NET CASH PROVIDED (USED IN) BY INVESTING ACTIVITIES


11,347







(31,336
)










(19,989
)FINANCING ACTIVITIES:Repayment of debt










(467
)










(467
)Proceeds from the exercise of employee stock options














1,805







1,805Excess tax benefit from stock-based compensation










526











526Proceeds from issuance of common stock under employee stock
    purchase plan














296







296Cash (paid to) received from affiliates


(5,564
)


(350
)


19,462



5,052



(18,600
)


NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES


(5,564
)


(350
)


19,521



7,153



(18,600
)


2,160NET INCREASE IN CASH AND CASH EQUIVALENTS


4,999







11,942











16,941CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


31,157







63,583











94,740CASH AND CASH EQUIVALENTS, END OF PERIOD


36,156







75,525











111,681  17




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING BALANCE SHEET FINANCIAL DATA
    As of May 31, 2007
    (Amounts in thousands)
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


SubsidiariesASSETSCurrent assets:Cash and cash equivalents

$
31,157


$



$
63,583


$



$



$
94,740Accounts receivable, net


41,999







46,293











88,292Inventory  phones and accessories, net


11,641







19,983











31,624Prepaid expenses and other current assets


11,856







6,401











18,257Total current assets


96,653







136,260











232,913Property, plant & equipment, net


249,297







325,206











574,503Debt issuance costs


15,288







27,584











42,872Restricted cash


5,926



















5,926U.S. wireless licenses










398,783











398,783Puerto Rico wireless licenses, net










54,159











54,159Goodwill


4,187



















4,187Investment in subsidiaries






934,484



611,390



(763,155
)


(782,719
)


Other assets


5,777







2,861











8,638Total

$
377,128


$
934,484


$
1,556,243


$
(763,155
)

$
(782,719
)

$
1,321,981LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITYCurrent liabilities:Accounts payable

$
14,183


$



$
6,656


$



$



$
20,839Accrued expenses and other current liabilities


89,143







102,381











191,524Payable to affiliates










125











125Total current liabilities


103,326







109,162











212,488Long-term debt


792,985



636,395



69,970



547,215







2,046,565Deferred income taxes


4,422







120,361











124,783Other liabilities


5,469







11,054











16,523Intercompany


11,319



1,041,540



1,149,938



(226,815
)


(1,975,982
)


Minority interest in subsidiaries










4,293











4,293Redeemable preferred stock


587,938







(9,300
)






(578,638
)


Stockholders (deficit) equity:Common stock














1,069







1,069Additional paid-in capital


(818,497
)






818,497



19,832







19,832Accumulated (deficit) equity


(310,074
)


(744,095
)


(717,732
)


(1,103,379
)


1,771,901



(1,103,379
)Accumulated other comprehensive loss


240



644















884(1,128,331
)


(743,451
)


100,765



(1,082,478
)


1,771,901



(1,081,594
)Less: treasury shares














(1,077
)






(1,077
)Total stockholders (deficit) equity


(1,128,331
)


(743,451
)


100,765



(1,083,555
)


1,771,901



(1,082,671
)Total

$
377,128


$
934,484


$
1,556,243


$
(763,155
)

$
(782,719
)

$
1,321,981  18




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING STATEMENT OF OPERATIONS FINANCIAL DATA
    For the Three Months Ended August 31, 2006
    (Amounts in thousands)
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)Revenue

$
99,083


$



$
128,018


$



$
(1,700
)

$
225,401Costs and expenses:Cost of services


17,989







26,570







(1,317
)


43,242Cost of equipment sold


6,474







22,210











28,684Sales and marketing


9,292







13,386











22,678General and administrative


20,868







20,391







(383
)


40,876Depreciation and amortization


16,627







15,591











32,218Loss (gain) on disposition of assets


543







(338
)










20571,793







97,810







(1,700
)


167,903Operating income


27,290







30,208











57,498(Loss) income from investments in subsidiaries






(2,162
)


(3,110
)


(2,162
)


7,434



Interest expense, net


(25,594
)


(17,294
)


16,263



(14,789
)


(9,300
)


(50,714
)Other (expense) income


(578
)






578











Intercompany interest allocation






17,294



(41,383
)


14,789



9,300



Income (loss) from continuing operations before income tax
    expense, minority interest in income of subsidiaries and income
    from equity investments


1,118



(2,162
)


2,556



(2,162
)


7,434



6,784Income tax expense


(4,228
)






(2,853
)










(7,081
)(Loss) income from continuing operations before minority
    interest in income of subsidiaries and income from equity
    investments


(3,110
)


(2,162
)


(297
)


(2,162
)


7,434



(297
)Minority interest in income of subsidiaries










(208
)










(208
)Income from equity investments










253











253(Loss) income from continuing operations


(3,110
)


(2,162
)


(252
)


(2,162
)


7,434



(252
)Income from discontinued operations










(1,907
)










(1,907
)Net (loss) income

$
(3,110
)

$
(2,162
)

$
(2,159
)

$
(2,162
)

$
7,434


$
(2,159
)  19




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  CONDENSED
    CONSOLIDATING STATEMENT OF CASH FLOWS FINANCIAL DATA
    For the Three Months Ended August 31, 2006
    (Amounts in thousands)
  Centennial


Centennial











CentennialPuerto Rico


Cellular





Centennial





CommunicationsOperations


Operating


Non-


Communications





Corp. andCorp.


Co. LLC


Guarantors


Corp.


Eliminations


Subsidiaries(Amounts in thousands)OPERATING ACTIVITIES:Net (loss) income


(3,110
)


(2,162
)


(2,159
)


(2,162
)


7,434



(2,159
)Adjustments to reconcile net (loss) income to net cash (used in)
    provided by operating activities:Depreciation and amortization


16,627







19,190











35,817Stock-based compensation expense


1,024







1,082











2,106Excess tax benefit from stock-based compensation










(43
)










(43
)Minority interest in income of subsidiaries










208











208Income from equity investments










(253
)










(253
)Equity in undistributed earnings (loss) of subsidiaries






(2,162
)


(3,110
)


(2,162
)


7,434



Distribution received from equity investment










215











215Loss (gain) on disposition of assets


543







(338
)










205Changes in assets and liabilities, net of effects of
    acquisitions and dispositions and other


(15,747
)


149,386



(81,053
)


(69,279
)


(10,888
)


(27,581
)NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES


(663
)


145,062



(66,261
)


(73,603
)


3,980



8,515INVESTING ACTIVITIES:Proceeds from disposition of assets, net of cash expenses










316











316Acquisition of minority interest, net










(2,500
)










(2,500
)Capital expenditures


(9,572
)






(7,290
)










(16,862
)NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES


(9,572
)






(9,474
)










(19,046
)FINANCING ACTIVITIES:Repayment of debt










(436
)










(436
)Proceeds from the exercise of employee stock options














210







210Excess tax benefit from stock-based compensation










43











43Proceeds from issuance of common stock under employee stock
    purchase plan














461







461Cash received from (paid to) affiliates


19,522



(145,062
)


56,588



72,932



(3,980
)


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


19,522



(145,062
)


56,195



73,603



(3,980
)


278NET INCREASE IN CASH AND CASH EQUIVALENTS


9,287







(19,540
)










(10,253
)CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


26,129







68,755











94,884CASH AND CASH EQUIVALENTS, END OF PERIOD


35,416







49,215











84,631  20




---



##### Table of Contents



NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 11.
    SUBSEQUENT
    EVENTS  3 4
       21




---



##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  EXECUTIVE
    OVERVIEW
  Company
    Overview
      Form 10-K Form 10-Q. Form 10-K.
  Managements
    Summary
           22




---



##### Table of Contents




    Gross postpaid and prepaid wireless additions
    Net gain (loss)  wireless subscribers
    ARPU
    Roaming revenue
    Penetration  wireless
    Postpaid churn  wireless
    Average monthly minutes of use per wireless subscriber
    Data revenue per average wireless subscriber
    Fiber route miles  Puerto Rico broadband
    Switched access lines  Puerto Rico broadband
    Dedicated access line equivalents  Puerto Rico
    broadband
    On-net
    buildings  Puerto Rico broadband
    Capital expenditures         23




---



##### Table of Contents



e-mail,
        On-net on-net
    CRITICAL
    ACCOUNTING POLICIES AND ESTIMATES
   24




---



##### Table of Contents




    it requires us to make assumptions because information was not
    available at the time or it included matters that were highly
    uncertain at the time we were making the estimate, and
    changes in the estimate or different estimates that we could
    have selected may have had a material effect on our consolidated
    financial condition or consolidated results of operations.  Allowance
    for Doubtful Accounts
    Property,
    Plant and Equipment  Depreciation
    Valuation
    of Long-Lived Assets
    Goodwill
    and Wireless Licenses  Valuation of Goodwill and
    Indefinite-Lived Intangible Assets
  Goodwill and Other
    Intangible Assets Disclosures about Segments of an
    Enterprise and Related Information
 25




---



##### Table of Contents



Stock-Based
    Compensation
  Share-Based Payment
      Income
    Taxes
  Accounting for Income Taxes
       26




---



##### Table of Contents



RESULTS
    OF OPERATIONS
  Consolidated
    Operations
    Three Months EndedAugust 31,2007


2006


$ Change


% Change(In thousands, except per share data)Operating income

$
63,277


$
57,498


$
5,779



10
%Income (loss) from continuing operations


6,280



(252
)


6,532




*Earnings per share from continuing operations:Basic


0.06



0.00



0.06




*Diluted


0.06



0.00



0.06




*     *
    
    Percentage not meaningful   27




---



##### Table of Contents



U.S.
    Wireless Operations
  Three Months EndedAugust 31,2007


2006


$ Change


% Change(In thousands)Revenue:Service revenue

$
109,340


$
91,709


$
17,631



19
%Roaming revenue


17,952



19,322



(1,370
)


(7
)Equipment sales


10,312



9,390



922



10Total revenue


137,604



120,421



17,183



14Costs and expenses:Cost of services


28,367



26,332



2,035



8Cost of equipment sold


18,779



19,015



(236
)


(1
)Sales and marketing


14,964



13,220



1,744



13General and administrative


22,355



18,163



4,192



23Total costs and expenses


84,465



76,730



7,735



10Adjusted operating income(1)

$
53,139


$
43,691


$
9,448



22
%     (1)
    
    Adjusted operating income represents the profitability measure
    of the segment  see Note 9 to the unaudited
    Condensed Consolidated Financial Statements for a reconciliation
    of consolidated adjusted operating income to the appropriate
    GAAP measure.  Revenue.
         28




---



##### Table of Contents



Costs and expenses.
        Puerto
    Rico Wireless Operations
  Three Months EndedAugust 31,2007


2006


$ Change


% Change(In thousands)Revenue:Service revenue

$
76,904


$
73,098


$
3,806



5
%Roaming revenue


1,136



1,467



(331
)


(23
)Equipment sales


3,298



2,975



323



11Total revenue


81,338



77,540



3,798



5Costs and expenses:Cost of services


13,091



12,419



672



5Cost of equipment sold


12,678



9,620



3,058



32Sales and marketing


9,000



7,730



1,270



16General and administrative


17,876



16,158



1,718



11Total costs and expenses


52,645



45,927



6,718



15Adjusted operating income(1)

$
28,693


$
31,613


$
(2,920
)


(9
)%     (1)
    
    Adjusted operating income represents the profitability measure
    of the segment  see Note 9 to the unaudited
    Condensed Consolidated Financial Statements for a reconciliation
    of consolidated adjusted operating income to the appropriate
    GAAP measure.  Revenue.
   29




---



##### Table of Contents



Costs and expenses.
        Puerto
    Rico Broadband Operations
  Three Months EndedAugust 31,2007


2006


$ Change


% Change(In thousands)Revenue:Switched revenue

$
13,602


$
13,835


$
(233
)


(2
)%Dedicated revenue


16,274



14,452



1,822



13Other revenue


2,128



2,024



104



5Total revenue


32,004



30,311



1,693



6Costs and expenses:Cost of services


7,599



6,977



622



9Cost of equipment sold


65



49



16



33Sales and marketing


1,425



1,569



(144
)


(9
)General and administrative


4,710



4,867



(157
)


(3
)Total costs and expenses


13,799



13,462



337



3Adjusted operating income(1)

$
18,205


$
16,849


$
1,356



8
%     (1)
    
    Adjusted operating income represents the profitability measure
    of the segment  see Note 9 to the unaudited
    Condensed Consolidated Financial Statements for a reconciliation
    of consolidated adjusted operating income to the appropriate
    GAAP measure. 30




---



##### Table of Contents



Revenue.
        Costs and expenses.
      LIQUIDITY
    AND CAPITAL RESOURCES
  Weighted
    Average Debt Outstanding and Interest Expense
  Three Months EndedAugust 31,2007


2006


Change(In millions)Weighted Average Debt Outstanding

$
2,046.8


$
2,135.4


$
(88.6
)Weighted Average Gross Interest Rate(1)


9.7
%


9.7
%


0.0
%Weighted Average Gross Interest Rate(2)


9.3
%


9.3
%


0.0
%Gross Interest Expense(1)

$
49.74


$
51.75


$
(2.01
)Interest Income

$
1.16


$
1.04


$
0.12Net Interest Expense

$
48.58


$
50.71


$
(2.13
)     (1)
    
    Including amortization of debt issuance costs of
    $2.0 million and $2.1 million for the three months
    ended August 31, 2007 and 2006, respectively(2)
    
    Excluding amortization of debt issuance costs of
    $2.0 million and $2.1 million for the three months
    ended August 31, 2007 and 2006, respectively     31




---



##### Table of Contents



Senior
    Secured Credit Facility
      High-Yield
    Notes
    1 8
  1 8
    Derivative
    Financial Instruments
   32




---



##### Table of Contents



Three Months Ended


% of Total CapitalAugust 31, 2007


Expenditures(Dollar amounts in thousands)U.S. Wireless

$
7,051



35.3
%Puerto Rico Wireless


7,473



37.4Puerto Rico Broadband


5,472



27.3Total capital expenditures

$
19,996



100.0
%Capitalized phones in Puerto Rico (included above in Puerto Rico
    Wireless)

$
6,238Property, plant and equipment, net at August 31, 2007

$
566,992  33




---



##### Table of Contents



ACQUISITIONS
    AND DISPOSITIONS
      COMMITMENTS
    AND CONTINGENCIES
     34




---



##### Table of Contents



Less than


1-3





AfterContractual Obligations

Total


1 Year


Years


3-5 Years


5 YearsLong-term debt obligations (net of unamortized discount)

$
2,047,789


$



$
44,562


$
550,453


$
1,452,774Interest on long-term debt obligations(1)


993,461



172,975



346,746



281,156



192,584Operating lease obligations


246,641



30,590



53,598



37,866



124,587Capital lease obligations


216,474



6,828



14,447



15,163



180,036Purchase obligations


43,758



10,582



21,879



11,297



Total contractual cash obligations


3,548,123



220,975



481,232



895,935



1,949,981Sublessor agreements


(3,950
)


(1,293
)


(1,902
)


(745
)


(10
)Net

$
3,544,173


$
219,682


$
479,330


$
895,190


$
1,949,971     (1)
    
    Interest payments are based on the Companys projected
    interest rates and estimated principle amounts outstanding for
    the periods presented.  SUBSEQUENT
    EVENTS
  3 4
       35




---



##### Table of Contents



CAUTIONARY
    STATEMENT FOR PURPOSES OF THE SAFE HARBOR
  PROVISIONS
    OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
    1995
      
    the effects of vigorous competition in our markets, which may
    make it difficult for us to attract and retain customers and to
    grow our customer base and revenue and which may increase churn,
    which could reduce our revenue and increase our costs;
    the fact that many of our competitors are larger than we are,
    have greater financial resources than we do, are less leveraged
    than we are, have more extensive coverage areas than we do, and
    may offer less expensive and more technologically advanced
    products and services than we do;
    changes and developments in technology, including our ability to
    upgrade our networks to remain competitive and our ability to
    anticipate and react to frequent and significant technological
    changes which may render certain technologies used by us
    obsolete;
    our substantial debt obligations, including restrictive
    covenants, which place limitations on how we conduct business;
    market prices for the products and services we offer may decline
    in the future;
    the effect of changes in the level of support provided to us by
    the Universal Service Fund;
    the effects of a decline in the market for our Code
    Division Multiple Access-based technology;
    the effects of consolidation in the telecommunications industry;
    general economic, business, political and social conditions in
    the areas in which we operate, including the effects of world
    events, terrorism, hurricanes, tornadoes, wind storms and other
    natural disasters;
    our access to the latest technology handsets in a timeframe and
    at a cost similar to our competitors;
    our ability to successfully deploy and deliver wireless data
    services to our customers, including next generation 3G and 4G
    technology;
    our ability to generate cash and the availability and cost of
    additional capital to fund our operations and our significant
    planned capital expenditures, including the need to refinance or
    amend existing indebtedness;
    our dependence on roaming agreements for a significant portion
    of our wireless revenue and the expected decline in roaming
    revenue over the long term;
    our dependence on roaming agreements for our ability to offer
    our wireless customers competitively priced regional and
    nationwide rate plans that include areas for which we do not own
    wireless licenses;
    our ability to attract and retain qualified personnel;
    the effects of governmental regulation of the telecommunications
    industry; 36




---



##### Table of Contents




    our ability to acquire, and the cost of acquiring, additional
    spectrum in our markets to support growth and advanced
    technologies;
    the effects of network disruptions and system failures;
    our ability to manage, implement and monitor billing and
    operational support systems;
    the results of litigation filed or which may be filed against
    us, including litigation relating to wireless billing, using
    wireless telephones while operating an automobile or possible
    health effects of radio frequency transmission;
    the relative liquidity and corresponding volatility of our
    common stock and our ability to raise future equity
    capital; and
    the influence on us by our significant stockholder and
    anti-takeover provisions.  Form 10-K
  ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     37




---



##### Table of Contents



Fiscal Year Ended August 31,2008


2009


2010


2011


2012


Thereafter


Total


Fair Value(In thousands)Long-term debt:Fixed rate

$



$
44,546


$
16


$
125


$
328


$
1,105,434


$
1,150,449


$
1,179,937Average fixed Interest rate


10.0
%


10.8
%


10.0
%


10.0
%


10.0
%


9.5
%


9.6
%


Variable rate

$



$



$



$
550,000


$



$
350,000


$
900,000


$
900,000Average variable Interest rate(1)


4.4
%


4.8
%


5.0
%


5.2
%


5.4
%


5.5
%


5.3
%


Interest rate swap (pay fixed, receive variable):Notional amount

$
450,000


























$
773Average pay rate


7.07
%Average receive rate


6.44
%Interest rate collar:Notional amount

$
300,000


























$
(253
)Cap


5.35  5.50
%Floor


4.24  4.95
%     (1)
    
    Represents the average interest rate before applicable margin on
    the Senior Secured Credit Facility debt.    ITEM 4.
    CONTROLS
    AND PROCEDURES  Rules 13a-15(e) 15d-15(e)
   38




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##### Table of Contents



PART II 
    OTHER INFORMATION
  ITEM 1.
    LEGAL
    PROCEEDINGS          ITEM 1A.
    RISK
    FACTORS  Form 10-K Form 10-K
  ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   39




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##### Table of Contents



ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 5.
    OTHER
    INFORMATION    ITEM 6.
    EXHIBITS    ExhibitNo.

Description31
.1

Certification of Michael J. Small, Chief Executive Officer,
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Thomas J. Fitzpatrick, Chief Financial Officer,
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of Michael J. Small, Chief Executive Officer,
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Thomas J. Fitzpatrick, Chief Financial Officer,
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  40




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##### Table of Contents



SIGNATURES
        Thomas
    J. Fitzpatrick
       Francis
    P. Hunt
     41